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Protect yourself from mortgage fraud and title fraud

REALTOR® Dave Starr on how to stay safe and protect your biggest investment.

There was one hot topic in the news in recent months that was sure to get homeowners’ attention.  

Both the Toronto Real Estate Board and the media in general were suddenly reporting on a number of disturbing cases where crooks had gained unwitting homeowners’ personal identification and either taken out on a mortgage on their home or sold it right out from under them. 

In January it was reported that homeowner impersonators were linked to 32 fraud cases in both Ontario and British Columbia. In this particular story, criminals were interested in homes with low or no mortgages. They would research the homeowners and create fake identification in their name. 

The start of 2023 definitely saw an uptick in fraudulent activity. Title fraud is a next-level crime, threatening the safety, security and livelihoods of unsuspecting homeowners. With criminals becoming more and more sophisticated, and this type of fraud on the rise, what can you do to protect yourself? 

What is title fraud? 

Your home’s title is a declaration of your ownership rights. Title fraud occurs when someone steals your title, or your identity, to steal funds using the value of your home. 

The most common form of title fraud involves someone impersonating you or stealing your identity. The criminals forge documents, changing the title on your home or property without your knowledge. Then, they take out a mortgage on your title—and disappear with the money. 

There have also been some recent cases where criminals have brazenly tried to sell a home—and collect the cash—without the owner’s knowledge.  

If they succeed, the funds they’re able to advance on a mortgage or sale in your name could leave you, the rightful owner, responsible for having to repay that amount. 

How to protect yourself 

There are a few simple steps you can take to protect yourself from becoming a victim of title fraud: 

• Before you buy a home, get a lawyer to check the property ownership history carefully. They should look for any irregularities or a false mortgage discharge. 

• Ask your lawyer to look for more than just the title deed. They should also examine surveys or plot plans, tax bills and assessment notices for anything out of the ordinary that doesn’t seem to add up. 

• Use a highly qualified real estate lawyer for your home purchase. This will ensure that the mortgage title discharge procedures are followed correctly, which will help prevent an opportunity where a criminal could take advantage. 

• Some lenders may require you to purchase Title Insurance to protect against title fraud. Even if they don’t, you may want to arrange this on your own. It’s a relatively inexpensive, one-time cost that, depending on the provider, will cover you for many years. 

• Regularly check the title of your home. To do a title search, you’ll need identifying details. This is usually done through a provincial land registry agent or the Government of Ontario’s virtual land registry office, OnLand

• In the event someone dies who is part of a co-ownership or a multigenerational mortgage, it’s important to have their name removed. This will prevent the advance of fraudulent funds. 

Signs to look out for 

Be alert! Ideally you want to detect identity fraud early. Here are some of the possible signs: 

• Tax statements or bills are unexpectedly mailed to your home, but they are addressed to a different person. 

• You receive a phone call from someone inquiring about a new mortgage or a sale that has been arranged for your property. 

• Bills do not arrive as expected. 

• Creditors contact you about purchases you did not make. 

• There are discrepancies in your bank or credit card statements. 

It’s important to regularly check your bank accounts, credit card statements, utility bills, and credit rating to ensure everything is in order. Vigilance is key. 

Other resources: 

Watch out for mortgage fraud is a list of tips from the Financial Services Regulatory Authority of Ontario. Understanding title insurance should also be required reading for homeowners. 

Learn more about real estate fraud from the Financial Consumer Agency of Canada.         

REALTOR® Dave Starr wants to help you protect your biggest investment. He can recommend a couple of reputable lawyers to represent any of your questions or needs. You can reach Dave at 416-520-3231.